Sterling has more than 15 years' of experience in telecom as an industry analyst and journalist. He covers optical networking, including packet-optical transport...MORE

Dan O'SheaAnalyst, Heavy Reading

Dan O'Shea has been covering the telecom industry for more than 20 years, writing about virtually every technology and market segment, and winning several ASBPE awards in the process...MORE

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Length: 36 Slides

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REPORTSEXECUTIVE SUMMARY

Next-Gen Core Transport Tracker – July 2017

This market tracker analyzes and forecasts the global market for core transport networking products. This edition of the tracker updates all of our core transport forecasts based on current market trends and 2016 actual data, and extends all of the forecasts out to 2021.

The global core transport market grew about 10% in 2016, and was worth almost $5.4 billion. In most respects, 2016 looked like a bounce-back year for a long-haul WDM market that featured minimal growth of 2.6% in 2015. The strongest quarter of the year was 2Q16, with $1.46 billion in sales across the vendor landscape, closely followed by 4Q16, when $1.43 billion was collected.

2016 results showed the core transport market growing about 8.6% last year, but we are expecting more modest growth in the years to come – around 3.2% for this year. The first three quarters of 2016 were very strong, with double-digit percentage growth in each period compared to the same period the year before, but activity quieted in 4Q16, as the worldwide core transport market grew only 1.6% that quarter over 4Q15.

Asia/Pacific, and China in particular, continues to be the biggest regional growth market in 1H16, followed by Europe. North America, the second most lucrative region for vendors in 2015, slid into third place as many service providers near the end of long-haul WDM upgrade cycles.

Heavy Reading forecasts that the global core optical transport market will increase at a 3.3% CAGR from 2016-2021, to reach a little more than $6.3 billion by the end of the forecast period. Lowering cost and increasing saturation of 100G, along with an long-anticipated sharp decline in 40G, play roles in moderating overall growth, as the overall market growth rate during this stretch will likely peak in 2018 at about 4.2%, then decline toward 2.7% in 2021.

This tracker also includes profiles of 8 leading vendors of core transport equipment, providing an overview of their market positioning and listing known customers. The vendors covered in this tracker are:

Ciena

Cisco Systems

Coriant

ECI Telecom

Huawei

Infinera

Nokia (Alcatel-Lucent)

ZTE

The list of vendors profiled may change over successive iterations of this market tracker.

In 2016 Huawei continued to dominate global market share among core optical transport suppliers, capturing almost 37% of all global revenue. Huawei led the market in Asia/Pacific and Europe, by a wide margin in both regions. Ciena ranked second in global share, with just over 14% of global revenue on $770.5 million in sales, as it continued to dominate the North American market. ZTE had $752.6 million in revenue worldwide, registering just a fraction below Ciena in global share. Nokia was close behind with $625.8 million and 12% market share, usurping Infinera's hold on fourth place. Infinera's $605.1 million in revenue was good for 11% share and fifth place.